Bulls are taking over Bitcoin this morning, as the price of the cryptocurrency has risen above its $12,000 psychological resistance on the back of increased support from the US central bank to the potential introduction of a digital currency.
The price of Bitcoin has been lifted 3.6% so far during today’s early cryptocurrency trading activity, currently sitting at $12,346 on above-average volume.
Remarks from the Chairman of the Federal Reserve, Jerome Powell, during a conference with the International Monetary Fund (IMF) on Monday helped lift the price of the cryptocurrency in this past few days, as the head of the US central bank acknowledged the benefits that a central bank digital currency – also known as a CBDS – would have for the economy.
That said, Chairman Powell also clarified that the Fed is still not ready to make a decision on the matter as the institution still has to weigh both the risks and the benefits of introducing this type of currency to the financial system.
“It’s more important for the United States to get it right than to be the first. Getting it right means we not only look at the potential benefits of CBDCs, but also the potential risks, and also recognize the important tradeoffs that have to be thought through carefully”, said Powell.
Bulls have pushed the price of Bitcoin (BTC) higher for 12 out of the last 15 sessions, with the cryptocurrency now approaching a key resistance level at $12,455 – the coin’s 17 August highs.
What’s next for Bitcoin?
Bitcoin bulls have managed to hold the coin’s $10,000 level in the past few weeks after the sharp downward move that followed the cryptocurrency’s 2020 highs.
That kind of support has translated into a double bottom pattern that has helped lift the price of the crypto-asset higher since 24 September, a day in which a big bullish engulfing took place, with the price moving almost $500 higher in a single session.
Meanwhile, Powell comments have added more fuel to the rally as the market was already expecting positive remarks towards digital currencies, while some other news including a report showing that China has conducted a CBDS test with a small group of consumers and a $50 million purchase of Bitcoin from digital payments platform Square have also helped in pushing the price of cryptocurrencies higher.
Moving forward, Bitcoin bulls have to hold their ground this time if the price moves higher than the $12,455 level as it is highly likely that big players will reap their recent profits in the following sessions, which could end up plunging the price of BTC below that threshold.